The competition watchdog will probe energy companies’ profits and margins amid soaring electricity and gas prices.
Power prices are trading five times higher than a year ago, prompting Treasurer Jim Chalmers to write to the Australian Competition and Consumer Commission and ask the regulator to investigate potential price gouging and anti-competitive conduct.
The ACCC confirmed they would launch a probe into several companies and assess any need for regulatory change to ensure the markets are functioning properly.
The move comes after the Australian Energy Market Operator made the unusual move last week to suspend the national electricity market by intervening and setting caps on power and gas amid widespread blackout risks.
Camera IconThe ACCC will probe potential price gouging and anti-competitive conduct in the gas and electricity markets. NCA NewsWire / Jeremy Piper Credit: News Corp Australia
ACCC chair Gina Cass-Gottlieb said the regulator would use its power to provide greater transparency to Australians.
“Under direction from the federal government, we will use our full information gathering powers to provide greater transparency around the factors influencing electricity and gas prices, including profits and margins from a wide range of energy companies,” Ms. Cass-Gottlieb said.
“In line with the Treasurer’s request, we will also assess and bring to the government’s attention any need for regulatory change to ensure electricity and gas markets function properly for the benefit of all Australian consumers.
“In addition, the federal Energy Minister with the state and territory energy ministers have requested the ACCC, as part of its ongoing inquiries on the national energy market, to report back in July 2022.”
The ACCC acknowledged global factors, namely Russia’s war in Ukraine, had heavily impacted global gas supply and prices.
“(And) a cold start to winter and a reliance on aging coal-fired power stations amplified challenges already facing the Australian energy market,” Ms. Cass-Gottlieb said.
“We are acutely aware of the pressures that rapidly rising energy prices are placing on Australian households and businesses.”
Camera IconACCC chair Gina Cass-Gottlieb says any need for regulatory change would be put to the government. NCA NewsWire / Christian Gilles Credit: News Corp Australia
Government frontbencher Bill Shorten said he welcomed the ACCC probe.
“I’m pleased they’re looking into this. Energy companies should not be making undue profits when everyone else is doing it hard with the cost of living and a winter snap, and we have got an energy system which is just ten years of delay and denial,” Mr. Shorten told the Nine Network.
“It’s prudential. The energy companies will make their case to the ACCC. But I think many Australians are wondering – are the energy companies taking advantage of this?
“We will get to the bottom of it.”
Ms. Cass-Gottlieb said they were working closely with the Australian Energy Regulator, and they had co-written to energy retailers to “remind them of their obligations” about electricity prices.
Retailers cannot set the price of their standing offers above the “safety net” established by the AER’s default market offer – or, in Victoria, the default offer placed by the Essential Services Commission.